Author Govert SchullerPosted on Categories Monetary Reform
The social democratic wing of the US Democratic Party is floating two important proposals: 1) provide financial services through the wide network of postal offices to the so-called ‘unbanked and underbanked’ population; and 2) cap interest rates at 15% [6].
Both proposals have connections with monetary reform. The Kucinich NEED Act caps interest rates at 8% and also stipulates that the total interest payments on a loan cannot exceed the principle amount (Section 502)[1].
The idea of extending financial services through the postal system is not only a long-established idea but has been practiced, and is still practiced, in many countries [2]. In European MR circles this proposal is re-activated, but then in connection to the introduction of Central Bank Digital Currency (CBDC) as a measure to insure financial stability and a step towards full monetary reform [3].
The other important aspect of postal banking is to make financial services more accessible and less predatory. Many reporters and writers like Ellen Brown [4] quote from a 2001 UN discussion paper the following idea:
The essential characteristic distinguishing postal financial services from the private banking sector is the obligation and capacity of the postal system to serve the entire spectrum of the national population, unlike conventional private banks which allocate their institutional resources to service the sectors of the population they deem most profitable[5].
For the sake of social justice and economic equality the ideas of capping interest rates and providing banking services through the postal system should stay on our radar.
[1]. Zarlenga, Stephen A. 2014. “Presenting the American Monetary Reform Manual”. Valatie, NY: American Monetary Institute.
[2]. d’Alcantara, Gonzales, Paul H. Dembinski, and Odile Pilley. 2014. “Postal financial services, development and inclusion: Building on the past and looking to the future”. Université de Fribourg. htt
[3]. Edgar Wortmann. 2018. “Design Principles for CBDC“. International Movement for Monetary Reform. 28 June 2018.
[4]. Brown, Ellen. 2013. “What We Could Do with a Postal Savings Bank: Infrastructure that Doesn’t Cost Taxpayers a Dime“. The Web of Debt Blog. 23 Sept 2013.
[5]. Scher, Mark. 2001. “Postal Savings and the Provision of Financial Services“. DESA Discussion Paper No. 22. New York: United Nations-Development Policy Analysis Division.
[6]. Nichols, John. 2019. “AOC and Bernie Put Postal Banking Back on the Agenda“. The Nation, 10 May 2019.